CableCARD, Any Subs?

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Cable operators last week began supplying systems with CableCARDs that will decrypt programming delivered to digital-cable ready televisions, but officials said there hasn't been any demand from consumers for the cards.

The Federal Communications Commission gave operators until July 1 to supply CableCARDs to subscribers who bought digital-cable ready televisions from consumer electronics companies such as Panasonic, Sharp and Sony.

The CableCARDs, about the size of a credit card, contain technology similar to those found in digital set-tops.

The cards are inserted into a slot in the back of the TVs, most of which also are HDTV-capable.

The first digital-cable ready TVs, which began shipping late last year, are only one-way, requiring subscribers that want video-on-demand and other interactive content to hook up a digital cable set-top.

Consumer electronics manufacturers and MSOs are still negotiating a standard that would allow for the creation of two-way digital-cable ready TVs, and an agreement isn't expected any time soon.

According to Consumer Electronics Association spokeswoman Jenny Miller, the CE industry expects there will be more than 1 million digital-cable ready TVs in U.S. homes by the end of 2004. She said operators and the CE industry would need to work together to get the word out about the availability of CableCARDs. “For there to be demand about something, consumers have to know about it, so the first project for all of us is to educate consumers about the arrival of digital-cable ready.”

But cable companies appear to be waiting for the availability of two-way TVs before initiating a big marketing push for CableCARDs. Indeed, a new HDTV marketing campaign unveiled last week by the Cable & Telecommunications Association for Marketing makes no mention of CableCARDs.

Operators surveyed last week said they planned to dispatch field technicians to subscribers that request CableCARDs, but that the cards could eventually be mailed to customer homes or distributed through retail outlets.

“We definitely in time want to be there [retail], but it's not going to happen from day one,” Comcast Corp. senior vice president of marketing and new products Andy Addis said at a CTAM media briefing in New York last week.

Cabletelevision Laboratories Inc. has given “qualified status” to CableCARDs manufactured by Motorola Inc., Scientific Atlanta Inc. and NDS Group plc. Operators will install CableCARDs from one of the vendors, depending upon which conditional access is delpoyed on a cable system.

WHAT SUBS PAY

Operators will maintain ownership of the cards, and lease them to subscribers, with prices varying per MSO.

Time Warner Cable and Adelphia Communications Corp. officials said they would charge $1.75 monthly for CableCARDs, while Cablevision Systems Corp. said it would charge $1.25.

Insight Communications Co. plans to charge $1.99 monthly for the CableCARDs.

But if a subscriber opts to lease Motorola's 6208 HD digital video recorder from the MSO, it won't charge anything for the CableCARD, a spokeswoman said.

Subscribers with digital set-tops wouldn't need a CableCARD to view programming. But since the Motorola 6208 DVR only contains one tuner, using a CableCARD in addition to the set-top would allow viewers to record one program while watching a show on another channel.

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